Brazilian online retailer Dafiti has received 15 million euros in funding from the International Finance Corp., a World Bank Group member. According to the company, the financing will be used for growth and expansion.
SAO PAULO, Jan. 28, 2014 /PRNewswire/ — The Dafiti Group, Latin America’s leading fashion e-commerce, today announced an equity investment of €15 million from The International Finance Corporation (IFC), a member of the World Bank Group and the largest global private sector development institution. In three years, the Dafiti Group was able to attract USD 275 million in funding from investors, including anchor investor, Investment AB Kinnevik, as well as JP Morgan, Quadrant Capital Advisors and Teachers’ (OTPP).
IFC’s investment will support Dafiti’s expansion and enable the company to consolidate its sustainable growth whilst raising environmental, social, and corporate governance standards and strengthening competitiveness through reduced operating costs and enhanced efficiency.
“We are proud of achieving high-level and rigorous standards that have enabled Dafiti to receive this impressive sum funding. It endorses Dafiti’s long-term commitment to Brazil, Argentina, Chile, Colombia, and Mexico and also reflects our solid and sustainable operations in each of these countries” said Dafiti co-founder Philipp Povel.
Dafiti employs more than 1,500 people in Brazil alone and supports jobs indirectly in logistics, information technology and by facilitating demand for locally sourced goods. The business will continue adding jobs and expanding choices for consumer goods in developing countries.
“Internet companies are speeding up modernization of the retail supply chain in developing countries, which is helping to promote consumer spending—a key component of economic growth,” said Atul Mehta, IFC’s Director of Manufacturing, Agribusiness and Services. “Their investment in logistics, information technology and marketing are rapidly generating employment, especially for women and young people.”
Since 2011, Dafiti has spurred the growth of online retail in Brazil and has influenced online consumption, especially in the ‘apparel’ category, which in 2013 for the first time became Brazil’s leading e-commerce category. According to e-bit, a specialized consultancy company, Brazil’s e-commerce is expected to grow by 25% in 2014, reaching R$28.5 billion in revenue.
Besides supporting Dafiti’s expansion, IFC will also invest up to €10 million in Lamoda, Russia’s leading online retailer that also operates in Kazakhstan. IFC supports investments in the retail sector in developing countries because of its economic importance in terms of employment, consumer spending, and tax revenues. In fiscal year 2013, IFC allocated more than US$600 million of long term and short term financing to the retail sector.